A performance appraisal, or performance review, is a formal interaction between an employee and her manager. This is when the performance of the employee is assessed and discussed in thorough detail, with the manager communicating the weaknesses and strengths observed in the employee and also identifying opportunities for the employee to develop professionally. In most instances, a performance appraisal is completed quarterly or annually.
A common performance appraisal method is the 360-degree feedback. In this scenario, whoever conducts the appraisal, such as a human resources manager, interviews an employee&rsquo;s supervisor, peers and any direct reports. This technique allows an appraiser to gain a complete profile of the employee. In addition to gauging the worker&rsquo;s job performance and technical skill set, an appraiser receives in-depth feedback on the employee&#039;s behavior. Measuring areas of subjectivity, such as character and leadership skills, allows an employer to manage an employee&rsquo;s development.
Management By Objectives
Management by objectives (MBO) is another modern method of performance appraisal. This technique was first promoted in the 1950s by management theorist Peter Drucker. MBO requires a manager and employee to agree upon specific, obtainable objectives with a set deadline. For example, a sales manager may be required to increase his revenue by 25 percent within three months. Once this goal is set, the responsibility is on the sales manager to direct himself towards the objective. With this technique, success or failure is easily defined.
An alternate type of performance appraisal is the ratings scale. This methodology requires an employer to develop an in-depth grading system, similar to the way students in school are assessed. This scale is then used to evaluate an employee&rsquo;s success within a variety of areas, such as technical skill set, teamwork and communication skills. There is typically a minimum required grade an employee must receive in order for the performance appraisal to be considered a success. Those that do not make the grade are often put on a performance improvement plan. This method is viewed by some management theorists as an egalitarian way of measuring individual performance.